Yes to job creation? No?

Despite the department of trade and industry scrapping some onerous black economic empowerment (BEE) requirements to encourage companies to participate in a youth work experience initiative, the initiative’s take-off has been stunted by the department’s delays in signing and publishing it into law.

The Youth Employment Service (Yes), an initiative that has the ambitious goal of providing one million South Africans with paid work experience over the next three years, faces growing risks of not receiving adequate support from the private sector.

This is until a gazette, a law governing the business-led initiative with the government, is not only signed but also published.

Yes chief executive Tashmia Ismail-Saville says she has been told by the department that the gazette has been signed, but will believe it when the gazette is eventually published.

“The signing of the gazette means that we can start getting commitments from companies on paper,” Ismail-Saville told Moneyweb. “Most of them will only commit to the initiative when they see the law.”

The department hadn’t responded to a request for comment regarding the gazette’s signing by the time of publishing.

The delays surrounding the Yes gazette underscore the bureaucracy of government and risk undermining the job creation initiative in the face of a youth unemployment crisis in South Africa.

Statistics SA recently revealed that the unemployment rate rose to 27.2% in the second quarter ofthis year (6.1 million people). Include the “discouraged workers” category, and the unemployment rate swells to 37.2%.

Arguably, government has been the biggest stumbling block for Yes.

The department initially imposed a requirement for companies participating in the initiative to invest 2.5% of their payroll in bursaries for black students at higher education institutions before they can qualify for BEE points.

Ismail-Saville believes this requirement has placed an unreasonable financial burden on companies, saying that 2.5% of payroll for a company would, in many cases, exceed the required investment in Yes.

“It would mean that all that money would have gone to bursary funds and none of it would have been for unemployed youth,” said Ismail-Saville.

Moneyweb

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“This has cost us millions in fees,” she said. “We have closed down very profitable products.”

Wierzycka said Sygnia made a decision that it could not continue paying the high fees charged by hedge fund managers when their